The widespread havoc caused by the recent floods in Chennai has brought into focus the job of identifying and recovering the losses suffered, by filing an insurance claim for the same. As is the case with such disasters, reports of damage or loss of vehicles are many. Here are few things to remember while filing a claim:

Damage to vehicles is common during heavy rains and floods..  The first step is to ascertain the extent of damage caused to the vehicle engine, and the financial implications of its repair. Take the help of an authorised service centre and intimate the insurer.

There are three possibilities: First, damage that can be repaired, for which a claim can be made. Second, in cases of ‘constructive total loss’ or in general insurance parlance where a vehicle is beyond repair, the insurer has to replace the vehicle after taking over the damaged vehicle, which will be monetised by the insurer later. The third possibility is the vehicle getting washed away and becoming untraceable. In such cases, insurers adopt a procedure similar to that of vehicle theft, which requires filing a complaint and a stipulated waiting period before getting the claim amount. 

Obviously, this is a matter of financial prudence. You need to factor in the aspect of no-claim bonus, considering the cost of repairs and its implication on no-claim bonus and premium rates. If you are not sure of the cost component, it’s better to file the claim first, and withdraw it later on the basis of cost-benefit analysis. 

Of late, almost all insurers have come forward with measures such as deploying more personnel to advise and assist policyholders. You have to be on the watch for the measures or contact your insurer. 

The insurance regulator generally chips in by directing the insurers to expedite the claims settlement process by deploying a larger number of field level staff. Second, the need for documentation could be waived in special cases. IRDAI also issues special guidelines to insurers. 

Chennai floods largest natural catastrophe in India in 2015: Swiss Re

There will be an impact, of course. However, insurance companies will be safe if the damage is on the higher side, as they can re-reclaim the same from re-insurers. For example, the loss in the previous Chennai floods was over Rs 3,000 crore as per industry estimates, and the burden was borne by the reinsurer.

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